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Yearend dollar demand piles up pressure on local importers

In Uncategorized on December 16, 2010 at 10:05 am

Surging demand for the US dollars at yearend pushed the dollar/Vietnam dong exchange rate up to the highest ever of VND21,570 on the unofficial market on December 1st, which will hurt local importers badly.

(Photo: Minh Tri)


The surge usually come at the end of every year, when local businesses buy more shipments to prepare for the Lunar New Year season and foreign firms need to transfer dollars to their home. It’s also the due dates of other businesses, who have to pay US dollar debts.


Many commercial lenders are indirectly selling the greenback at higher rates than the State Bank of Vietnam’s regulated one by charging foreign currency transactions fee and cash counting fee and payment fee, many importers said. 


Local importers have to accept to pay those extra fees as they have no other choice, said Vietnam Young Business Association chairman Vo Quoc Thang.


They need to pay their foreign suppliers in time, so they are willing to buy dollars at high prices, he said. With purchase orders’ prices remaining unchanged, these extra fees generate big losses to the importers.


Do Duy Thai, general director of the steel maker Thep Viet, said commercial banks sell the greenback at the exchange rate of VND21,550 per one US dollar. “Both bank interest rate and the US dollar/Vietnam dong exchange rate are on a rise, leaving local businesses struggling to pay their imported shipments,” Thai said.


A director of a Ho Chi Minh City-based lender, who wanted to be unnamed, said banks bought dollars from exporters, who tried to take profits from the dollar’s surging demand by selling at high prices.


Therefore the lenders will incur losses if they sell dollars at the regulated rate, the director said.


The State Bank of Vietnam earlier announced it would continue to sell dollars to essential-product importers, but commercial banks said the supply didn’t meet the demand.


Dr. Tran Du Lich, member of the National Monetary Policy Consulting Council, recommended that the central bank should name the importers, who are allowed to buy dollars, so they don’t have to purchase at the unofficial market.


This move will also prevent local businesses from importing luxury products, which will widen the trade gap. Lich said. The central bank also has to strictly forbid illegal foreign currency exchanges, which are taking place at the so-called black market, he said.


Nguyen Hoang Minh, deputy director of  the State Bank of Vietnam’s Ho Chi Minh City branch, noticed speculators pushed the dollar/Vietnam dong exchange rates on the unofficial market up to cash in the rising demand.


Statistics of the branch shows that the amount of US dollar deposits reached VND188.2 billion (US$9 million), rising 12 percent so far this year. The amount of US dollar loans rose 35.4 percent to VND184.880 billion, according to the central bank’s HCMC branch.

Source: SGGP

Yearend dollar demand piles up pressure on local importers

In Uncategorized on December 16, 2010 at 10:05 am

Surging demand for the US dollars at yearend pushed the dollar/Vietnam dong exchange rate up to the highest ever of VND21,570 on the unofficial market on December 1st, which will hurt local importers badly.

(Photo: Minh Tri)

The surge usually come at the end of every year, when local businesses buy more shipments to prepare for the Lunar New Year season and foreign firms need to transfer dollars to their home. It’s also the due dates of other businesses, who have to pay US dollar debts.


Many commercial lenders are indirectly selling the greenback at higher rates than the State Bank of Vietnam’s regulated one by charging foreign currency transactions fee and cash counting fee and payment fee, many importers said. 


Local importers have to accept to pay those extra fees as they have no other choice, said Vietnam Young Business Association chairman Vo Quoc Thang.


They need to pay their foreign suppliers in time, so they are willing to buy dollars at high prices, he said. With purchase orders’ prices remaining unchanged, these extra fees generate big losses to the importers.


Do Duy Thai, general director of the steel maker Thep Viet, said commercial banks sell the greenback at the exchange rate of VND21,550 per one US dollar. “Both bank interest rate and the US dollar/Vietnam dong exchange rate are on a rise, leaving local businesses struggling to pay their imported shipments,” Thai said.


A director of a Ho Chi Minh City-based lender, who wanted to be unnamed, said banks bought dollars from exporters, who tried to take profits from the dollar’s surging demand by selling at high prices.


Therefore the lenders will incur losses if they sell dollars at the regulated rate, the director said.


The State Bank of Vietnam earlier announced it would continue to sell dollars to essential-product importers, but commercial banks said the supply didn’t meet the demand.


Dr. Tran Du Lich, member of the National Monetary Policy Consulting Council, recommended that the central bank should name the importers, who are allowed to buy dollars, so they don’t have to purchase at the unofficial market.


This move will also prevent local businesses from importing luxury products, which will widen the trade gap. Lich said. The central bank also has to strictly forbid illegal foreign currency exchanges, which are taking place at the so-called black market, he said.


Nguyen Hoang Minh, deputy director of  the State Bank of Vietnam’s Ho Chi Minh City branch, noticed speculators pushed the dollar/Vietnam dong exchange rates on the unofficial market up to cash in the rising demand.


Statistics of the branch shows that the amount of US dollar deposits reached VND188.2 billion (US$9 million), rising 12 percent so far this year. The amount of US dollar loans rose 35.4 percent to VND184.880 billion, according to the central bank’s HCMC branch.

Source: SGGP

Traffic piles up at Can Tho Ferry in Mekong delta

In Vietnam Society on September 28, 2009 at 9:07 am

With vehicles weighing more than 12 tons being prohibited from traveling on Highway 80 between Vinh Long and Dong Thap Provinces during flood seasons, they are forced to take the ferry crossing from Vinh Long to Can Tho, causing long queues on either bank.








This file photo shows vehicles await at the Can Tho ferry station in August

Things are worse on the Vinh Long side, with two or three lines of trucks and buses extending for up to two kilometers during rush hour.


Thirteen ferries of 100 to 200 tons operate all 24 hours but still fail to cope with the traffic.


Around 7,000 trucks and buses and 60,000 motorbikes use the ferry station every day.


With Highway 80 now closed to them, large vehicles have to make their way to Dong Thap and An Giang through Can Tho.


Source: SGGP